The Central Bank of The Bahamas has selected blockchain startup NZIA Limited to design and implement the digital fiat currency system for the Caribbean country.

The country’s digital fiat currency initiative was first announced in June 2018 by K Peter Turnquest, Deputy Prime Minister and Minister of Finance of the Bahamas. In August, the central bank asked firms to submit expressions of interest (EOI) to supply blockchain or other robust technology solutions for the project.

In its latest announcemnet, the central bank said that the initiative will be named “Project Sand Dollar” and announced NZIA Limited as the preferred technology solutions provider for the project. The central bank described NZIA as combining the collective know-how and expertise of the Zynesis blockchain research and development (R&D) lab and tech giant IBM. NZIA will help the central bank in modernizing and streamlining the Caribbean country’s financial system.

“The central bank expects that at the conclusion of this project all residents in The Bahamas will have equal, expanded access to modernised digital payments capabilities,” the central bank said. “A concurrent reduction in cash transactions is also expected. The evolved Bahamian payments infrastructure should reduce service delivery costs, increase transactional efficiency and improve the overall level of financial inclusion in communities throughout the archipelago.”

The central bank further said that the draft regulatory Central Bank of the Bahamas Bill 2019 will provide the foundation to develop regulations to govern the instrument. The regulatory framework will include safeguards to satisfy Exchange Control Regulations, monitoring and controls against money laundering and terrorist financing, and specifications to ensure complementarity as opposed to material substitutability for existing banking services.